CRS & CARF Guide and Information Notice

🌍 What is CRS?

CRS stands for the Common Reporting Standard — an international agreement between tax authorities that allows them to share information about financial accounts, so that income and assets held abroad cannot be hidden from tax authorities.

🪙 What is CARF?

CARF stands for the Crypto-Asset Reporting Framework. It applies the same principle to crypto-assets: as crypto platforms have grown, tax authorities extended similar reporting rules to cover crypto holdings and transactions, not just traditional bank accounts.

The section “Entity classification for CARF purposes” will be used and applied by VNX Global Ltd. once CARF comes into force in Bermuda.

✅ Why does VNX ask for this?

This is not a VNX policy choice — it is a legal requirement. As a Bermuda reporting financial institution and reporting crypto-asset service provider, VNX Global Ltd. may be required to collect this information and report it to the competent authority of Bermuda — currently the Corporate Income Tax Agency (CITA), or any successor authority — under the CRS and/or CARF regimes.

🔒 CRS and CARF Information Notice

VNX Global Ltd. may be required, as a Bermuda reporting financial institution and a reporting crypto-asset service provider, to collect and report information for automatic exchange of tax information under the CRS and/or CARF. Information may be reported to the competent authority of Bermuda for automatic exchange of information, currently the Corporate Income Tax Agency (CITA) or any successor authority.

Information that may be collected, processed and reported includes, in particular, the entity’s identification details, address, jurisdiction(s) of tax residence, Tax ID(s), CRS entity classification, CARF entity status, account balance or value, relevant financial account information, relevant crypto-asset accounts, wallet addresses, reportable crypto-asset transactions, and, where applicable, information relating to Controlling Persons.

Reported information may be exchanged with the competent tax authority(ies) of the relevant reportable jurisdiction(s), including the jurisdiction(s) in which the entity and/or its Controlling Persons are tax resident, in accordance with applicable laws and international agreements. Such information may be used only for purposes permitted under applicable laws and international agreements governing automatic exchange of tax information. Data protection rights apply subject to the special rules and restrictions of the CRS / CARF regimes.

VNX cannot provide tax advice. If you encounter difficulties completing tax information for CRS and CARF purposes, please consult your tax adviser or local tax authority.

🌍 How do I indicate the Legal Entity’s Tax Residence and Tax ID?

Please list all jurisdictions in which the legal entity is resident for tax purposes under the domestic law of those jurisdictions. If there is more than one jurisdiction of tax residence, list all of them. For each jurisdiction, provide the Taxpayer Identification Number (Tax ID) or functional equivalent, where applicable.

If a Tax ID is not provided, tick the applicable reason and provide an explanation where requested. A Tax ID should be omitted only where this is permitted under the CRS / CARF due diligence rules.

If the Legal Entity is resident in multiple jurisdictions and the questionnaire does not contain enough fields to complete all information, please contact the VNX team at support@vnx.io.

💬 How do I classify my legal entity for CRS and CARF purposes?

Please tick one box for your entity classification under CRS and one box for CARF. The CRS classification is separate from the CARF classification, so both sections should be completed.

For CARF purposes, an entity that is neither an Active Entity nor an Excluded Person should be classified as Other Entity.

To determine the appropriate entity classification, please refer to the definitions below.

The following summary is for convenience only. In case of discrepancy, the applicable Bermuda CRS legislation, guidance and the OECD Common Reporting Standard prevail.

NFE: a Non-Financial Entity, meaning an Entity that is not a Financial Institution.

Active NFE: any NFE that meets any of the following criteria:

a) Active trade or business: less than 50% of the NFE’s gross income for the preceding calendar year or other appropriate reporting period is passive income and less than 50% of the assets held by the NFE during the preceding calendar year or other appropriate reporting period are assets that produce, or are held for the production of, passive income;

b) Publicly traded corporation or its related entity: the stock of the NFE is regularly traded on an established securities market, or the NFE is a Related Entity of an Entity the stock of which is regularly traded on an established securities market;

c) the NFE is a Governmental Entity, an International Organisation, a Central Bank, or an Entity wholly owned by one or more of the foregoing;

d) Holding company within a non-financial group: substantially all of the activities of the NFE consist of holding, in whole or in part, the outstanding stock of, or providing financing and services to, one or more subsidiaries that engage in trades or businesses other than the business of a Financial Institution, except that an Entity shall not qualify for this status if the Entity functions, or holds itself out, as an investment fund, such as a private equity fund, venture capital fund, leveraged buyout fund, or any investment vehicle whose purpose is to acquire or fund companies and then hold interests in those companies as capital assets for investment purposes;

e) Start-up - less than 24 months since formation: the NFE is not yet operating a business and has no prior operating history, but is investing capital into assets with the intention of operating a business other than that of a Financial Institution, provided that the NFE does not qualify for this exception after the date that is 24 months after the date of the initial organisation of the NFE;

f) Liquidating or reorganising NFE: the NFE was not a Financial Institution during the past five years and is in the process of liquidating its assets or is undergoing a reorganisation with the intention of continuing or recommencing operations in a business other than that of a Financial Institution;

g) Treasury centre within a non-financial group: the NFE primarily engages in financing and hedging transactions with, or for, Related Entities that are not Financial Institutions, and does not provide financing or hedging services to any Entity that is not a Related Entity, provided that the group of such Related Entities is primarily engaged in a business other than that of a Financial Institution; or

h) Qualifying non-profit NFE: the NFE meets all of the following requirements:

i) it is established and operated in its jurisdiction of residence exclusively for religious, charitable, scientific, artistic, cultural, athletic or educational purposes; or it is established and operated in its jurisdiction of residence and is a professional association, business league, chamber of commerce, labour organisation, agricultural or horticultural organisation, civic league, or an organisation operated exclusively for the promotion of social welfare;

ii) it is exempt from income tax in its jurisdiction of residence;

iii) it has no shareholders or members who have a proprietary or beneficial interest in its income or assets;

iv) the applicable laws of the NFE’s jurisdiction of residence, or the NFE’s formation documents, do not permit any income or assets of the NFE to be distributed to, or applied for the benefit of, a private person or a non-charitable Entity other than pursuant to the conduct of the NFE’s charitable activities, as payment of reasonable compensation for services rendered, or as payment representing the fair market value of property acquired by the NFE; and

v) the applicable law of the NFE’s jurisdiction of residence, or the NFE’s formation documents, require that, upon the NFE’s liquidation or dissolution, all of its assets be distributed to a Governmental Entity or another non-profit organisation, or escheat to the government of the NFE’s jurisdiction of residence or any political subdivision thereof.

Central Bank: an institution that is by law or government sanction the principal authority, other than the government of the jurisdiction itself, issuing instruments intended to circulate as currency. Such an institution may include an instrumentality that is separate from the government of the jurisdiction, whether or not owned in whole or in part by the jurisdiction.

Central Bank Digital Currency: any digital Fiat Currency issued by a Central Bank.

Controlling Person: the natural persons who exercise control over an Entity. In the case of a trust, such term means the settlor(s), the trustee(s), the protector(s) (if any), the beneficiary(ies) or class(es) of beneficiaries, and any other natural person(s) exercising ultimate effective control over the trust, and in the case of a legal arrangement other than a trust, such term means persons in equivalent or similar positions.

CRS Participating Jurisdiction: a jurisdiction with which an agreement is in place pursuant to which it will provide the information required under the Common Reporting Standard, and which is identified in a published list.

Crypto-Asset: a digital representation of value that relies on a cryptographically secured distributed ledger or a similar technology to validate and secure transactions.

Custodial Institution: an Entity that holds financial assets for the account of others as a substantial portion of its business. An Entity is treated as holding financial assets for the account of others as a substantial portion of its business if the Entity’s gross income attributable to the holding of Financial Assets and related financial services equals or exceeds 20% of the Entity’s gross income during the applicable testing period.

Depository Institution: an Entity that accepts deposits in the ordinary course of a banking or similar business; or holds Specified Electronic Money Products or Central Bank Digital Currencies for the benefit of customers.

Entity: a legal person or a legal arrangement, such as a corporation, partnership, trust, or foundation.

Fiat Currency: the official currency of a jurisdiction, issued by a jurisdiction or by a jurisdiction’s designated Central Bank or monetary authority, as represented by physical banknotes or coins or by money in different digital forms, including bank reserves and Central Bank Digital Currencies. The term also includes commercial bank money and electronic money products (including Specified Electronic Money Products).

Financial Asset: includes a security (for example, a share of stock in a corporation; partnership or beneficial ownership interest in a widely held or publicly traded partnership or trust; note, bond, debenture, or other evidence of indebtedness), partnership interest, commodity, swap (for example, interest rate swaps, currency swaps, basis swaps, interest rate caps, interest rate floors, commodity swaps, equity swaps, equity index swaps, and similar agreements), Insurance Contract or Annuity Contract, or any interest (including a futures or forward contract or option) in a security, Relevant Crypto-Asset, partnership interest, commodity, swap, Insurance Contract, or Annuity Contract. The term “Financial Asset” does not include a non-debt, direct interest in real property.

Financial Institution: a Custodial Institution, Depository Institution, Investment Entity or Specified Insurance Company.

Investment Entity: an Entity that primarily conducts, as a business, one or more of the following activities or operations for or on behalf of a customer:

“Investment Entity” also includes an Entity whose gross income is primarily attributable to investing, reinvesting or trading in Financial Assets or Relevant Crypto-Assets, if the Entity is managed by another Financial Institution.

NFE: a Non-Financial Entity, meaning an Entity that is not a Financial Institution.

Passive NFE: an NFE that is not an Active NFE. A Passive NFE generally requires identification and reporting of its Controlling Persons where they are reportable persons.

Related Entity: an Entity is a Related Entity of another Entity where one controls the other, or both are under common control. Control generally means direct or indirect ownership of more than 50% of both the voting rights and the value of the Entity, including through a chain of controlled entities.

Relevant Crypto-Asset: any Crypto-Asset that is not a Central Bank Digital Currency, a Specified Electronic Money Product or any Crypto-Asset for which the Reporting Crypto-Asset Service Provider has adequately determined that it cannot be used for payment or investment purposes.

Reportable Person / Reportable Account: a person or account that is reportable under CRS because of tax residence in a reportable jurisdiction, subject to the exclusions and conditions in the CRS rules.

Specified Electronic Money Product: any product that is:

a) a digital representation of a single Fiat Currency;

b) issued on receipt of funds for the purpose of making payment transactions;

c) represented by a claim on the issuer denominated in the same Fiat Currency;

d) accepted in payment by a natural or legal person other than the issuer; and

e) by virtue of regulatory requirements to which the issuer is subject, redeemable at any time and at par value for the same Fiat Currency upon request of the holder of the product.

The term “Specified Electronic Money Product” does not include a product created for the sole purpose of facilitating the transfer of funds from a customer to another person pursuant to instructions of the customer. A product is not created for the sole purpose of facilitating the transfer of funds if, in the ordinary course of business of the transferring Entity, either the funds connected with such product are held longer than 60 days after receipt of instructions to facilitate the transfer, or, if no instructions are received, the funds connected with such product are held longer than 60 days after receipt of the funds.

Specified Insurance Company: an Entity that is an insurance company, or the holding company of an insurance company, that issues, or is obligated to make payments with respect to, a cash value insurance contract or an annuity contract.

The following summary is for convenience only. In case of discrepancy, the applicable Bermuda CARF legislation, guidance and OECD CARF rules prevail.

Active Entity means an Entity that meets one of the following criteria:

a) Less than 50% of the Entity’s gross income for the preceding calendar year or other appropriate reporting period is passive income and less than 50% of the assets held by the Entity during the preceding calendar year or other appropriate reporting period are assets that produce, or are held for the production of, passive income.

b) Substantially all of the activities of the Entity consist of holding, in whole or in part, the outstanding stock of, and providing financing and services to, one or more subsidiaries that engage in a business other than the business of a Financial Institution, except that an Entity shall not qualify for this status if the Entity functions, or holds itself out, as an investment fund, such as a private equity fund, venture capital fund, leveraged buyout fund, or any investment vehicle whose purpose is to acquire or fund companies and then hold interests in those companies as capital assets.

c) The Entity does not yet operate a business and has not previously operated a business, but is investing capital in assets with the intention of operating a business other than the business of a Financial Institution; however, this exception ceases to apply after the date falling 24 months after the Entity’s date of formation.

d) The Entity was not a Financial Institution during the past five years and is in the process of liquidating its assets or is undergoing a reorganisation with the intention of continuing or recommencing a business other than the business of a Financial Institution.

e) The Entity’s activities consist primarily of financing and hedging transactions with, or for, Related Entities that are not Financial Institutions, and the Entity does not provide financing or hedging services to any Entity that is not a Related Entity, provided that the group of such Related Entities is primarily engaged in a business other than the business of a Financial Institution.

f) The Entity meets all of the following requirements:

aa) It is established and operated in its jurisdiction of residence exclusively for religious, charitable, scientific, artistic, cultural, athletic, or educational purposes; or it is established and operated in its jurisdiction of residence and is a professional association, business league, chamber of commerce, labour organisation, agricultural or horticultural organisation, civic league, or an organisation operated exclusively for the promotion of social welfare.

bb) It is exempt from income tax in its jurisdiction of residence.

cc) It has no shareholders or members that have a proprietary or beneficial interest in its income or assets.

dd) The applicable law of the Entity’s jurisdiction of residence, or the Entity’s formation documents, do not permit any income or assets of the Entity to be distributed to, or applied for the benefit of, a private person or a non-charitable Entity other than pursuant to the conduct of the Entity’s charitable activities, as payment of reasonable compensation for services rendered, or as payment representing the fair market value of property acquired by the Entity.

ee) The applicable law of the Entity’s jurisdiction of residence, or the Entity’s formation documents, require that, upon the Entity’s liquidation or dissolution, all of its assets be distributed to a Governmental Entity or another charitable organisation, or escheat to the government of the Entity’s jurisdiction of residence or any political subdivision thereof.

Excluded Person means:

a) An Entity the stock of which is regularly traded on one or more established securities markets.

b) An Entity that is a Related Entity of an Entity described in subparagraph a).

c) A Governmental Entity.

d) An International Organisation.

e) A Central Bank.

f) A Financial Institution, other than an Investment Entity.

Controlling Person: a natural person who exercises control over the entity, including through ownership, other means of control or, if no such person is identified, senior management. For trusts and similar legal arrangements, this includes persons such as settlors/founders, trustees or board members, protectors and beneficiaries, as applicable.